Launched in 1992, Phat Farm developed its product line slowly. Over time, demand grew and sales in 2001 toppled over US$ 200 million, stretching beyond one of the first-to-market urban clothing lines, Karl Kani.

So it seems that mainstream brands like Motorola stand to benefit a great deal by associating with hot urban brands like Phat Farm. But in a co-branding venture such as this, is it possible for the smaller company (Phat Farm with global sales currently US$ 200 million) to get swallowed up by the larger one, (mega-mobile phone empire Motorola; whose global sales reached $30 billion in 2001) in terms of identity and sales?

"Yes, but not likely," says Paul R. Ratoff, retail apparel marketing consultant and president of Ratoff Consulting. "Motorola benefits because it's targeting a market segment that may not value the Motorola brand and Phat Farm brings them into that market. If the product is the same [no value added], there will be no lasting impact. The consumer is too smart.

"Phat [Farm] benefits by having its name on more items in its targeted market which expands brand awareness," continues Ratoff. "But if Phat [Farm] is not interested in going mainstream, it might also hurt the brand. It is possible to get swallowed up by the larger partner but probably because of other issues. The biggest fear of a niche company is the loss of its uniqueness in its market by going mainstream."

Although Phat Farm clothing has essentially aligned itself with a broad target market that appears ever-growing internationally, the apparel industry is trendy and fickle. The urban consumer sets the trends that follow suit on media pop cultural influences such as Viacom-owned MTV and Black Entertainment Television, Vibe Magazine and Hollywood. In such an uncertain market does a co-branding venture such as this even make sense?

"I think it does because the essentials of co-branding are to tap into a lifestyle of the audience, which both brands do," says Damon Haley, vice president of Urban Marketing Corporation of America, a Los Angeles-based advertising agency and media research firm. "Whenever you're talking about fashion, you're talking about attitude and lifestyle. You've got to tap into the elements of the lifestyle.

"Where it wouldn't work," Haley adds, "is when there is disconnection within the market. You cannot cross-promote Levi’s and Geritol to a youth consumer base."

While Phat Farm's Janha agrees that the urban consumer is a tricky market, he is confident the brand will maintain its identity no matter what by continuing to give the consumer exactly what he/she wants. And although the spending power in the urban apparel industry is growing, Janha is still surprised at the attitudes of marketing executives of some Fortune 500 companies, which present many challenges when any urban-based business is looking to co-brand.

"Bigger companies still don't quite understand the urban market – some not at all," says Jahna, in a telephone interview. "People who make key decisions are still unfamiliar with the urban target market. For us, Motorola was a natural fit to approach. And for the moment, we're doing our part and making them aware of who Phat Farm is – that we're selling in Macy's, we're selling in Bloomingdale's…. We keep doing the same thing, and we have a great CEO that people can actually look up to. We try to stick to the core, and don't go too far, just keep doing the same thing."

Just doing the same thing seems to work. Seeking broader markets while keeping true to its brand may allow Phat Farm to expand its global market without having to leave the streets it grew up on.    

[6-Jan-2003]